There are a lot of factors to be considered when trying to find out why  the cost of health care is rising and unfortunately there are no simple quick answers, but here are just 3 very basic reasons why costs have no where else to go but up :

1.      Tort reform – it is no secret that when a lawyer sues a doctor on the behalf of a patient because he/she used the wrong color tongue depressor, costs will go up. Yes, there has been legislation limiting the amount that doctors have to pay due to malpractice but they still need to plan for any such issue which means they have to buy insurance. The average cost of this insurance is anywhere from $4,000 a year to $50,000 a year depending on Specialty & Residency.

2.     The cost to educate providers – today’s colleges & universities are not cheap and the average student looking to earn a medical degree can expect to pay over $100,000 in costs just to get educated on top of the bills they mount up due to undergraduate course work. And when they do graduate  they get to become a resident for roughly 3 years at a pay grade that will not help pay down that debt.

3.     Medicare – believe it or not one the biggest culprits to rising costs is something we all have to get when we retire and some say it is the main driver behind rising costs.


Medicare only reimburses health providers for services rendered at a fraction of the real costs so the health providers have no other choice but to raise costs for those that have private insurance.

Doubt this, well let’s look at what Medicare pays a physician for  a simple colonoscopy vs. what private insurers on average pay for the same services

On average Medicare pays roughly only $0. 47 on the dollar to those who provide qualified care. Is it a wonder why Physicians are turning Medicare recipients away?

Again, these are just 3 simple reasons why we may be seeing the cost of health care rising and once we factor in the numbers of demand, 47 million on Medicare with 78 million heading towards it over the next 18 years, the costs have only one place to go when it appears that close to 1/3 of our population will be enrolled in Medicare. 



Comments are closed.

comments powered by Disqus